The United States has frozen the assets of two branches of a Saudi-based charity that are alleged to have provided financial support for terrorist activities.

The Somali and Bosnia-Hercegovina offices of the al-Haramain Islamic Foundation join a growing list of individuals and organisations suspected by the US of financing or engaging in terrorism, which now stands at 191 names.

O'Neill: A new level of co-ordination

Al-Haramain is active in more than 50 countries, promoting activities such as building mosques and promoting educational and development projects.

US Treasury Secretary Paul O'Neill said the action, which was being taken jointly with the Government of Saudi Arabia, marked a new level of co-ordination in the fight against international terrorism.

Terror links

According to the US Treasury, the Somali office had links with Osama Bin Laden's al-Qaeda network and a Saudi group already on
their blacklist - the al-Ittihad al-Islami movement.

The al-Haramain office was allegedly helping al-Ittihad members travel to Saudi Arabia, where they planned to apply for residency permits.

The Bosnian office was linked to an Egyptian
terror group, al-Gamaat al-Islamiyya, the Treasury said.

Al-Haramain was among six Islamic charities banned in Kenya in 1998 on suspicion of
involvement in the bomb attack on the US embassy in Nairobi.

Saudi co-operation

Mr O'Neill stressed that the al-Haramain group as a whole was recognised as legitimate.

But Pete Seda, director of the US branch of the foundation, said the organisation was "shocked and dismayed" by the Treasury's action.

"We are not aware of any individual in our organisation who is involved in terrorist activity and we invite law enforcement agencies to help us find and eliminate anyone who may be involved," he said.

Lawsuit

Last week, a Muslim charity based in Texas - the Holy Land Foundation for Relief and
Development - filed a federal lawsuit against the Treasury and other agencies for freezing its assets in December, claiming its constitutional rights had been infringed.

The group denied that it had given support to the militant Islamic group Hamas, as alleged by the US Government.

About $104m in assets have been frozen domestically and abroad as part of the
US war against terror.

But Mr O'Neill acknowledged that the campaign would become more complicated as it became more successful, because "they will invent new ways to obtain funds", such as using gold and jewellery markets to move funds around, he said.

Somalia's foreign minister proposed on Monday that Washington should assign a US bank to handle the transactions of another Somali group which the US blocked last November for alleged links with terrorism.

Yusuf Hassan Ibrahim told a UN Security Council meeting that the move would allow the US to unfreeze the assets of the group - the al-Barakaat financial network - and give account holders access to their money, while simultaneously ensuring that it was not used improperly.